IOOF Holdings (IFL)

UBS has lifted
IOOF
to “buy" from “neutral" given its recent share price weakness, but the broker has left its price target unchanged at $8.15.

Analysts have left the stock’s price target unchanged at $8.15, but believe there is more certainty around platform mergers progressing, regulatory risk and the future of Skandia and Global One funds under management.

“Sub-$7 we see the stock as cheap given strong cash flow and the potential for M&A activity," said analyst Lachlan Parker.

According to UBS calculations, the stock trades on a fiscal 2012 price earnings multiple adjusted for cash, offering a dividend yield of between 6 per cent and 7 per cent over the next two years.

UBS also calculates that Global One’s merger synergies of $19 million after tax have already paid back its acquisition price.